Turmoil caused by Switzerland’s shock move to abandon the franc’s peg to the euro struck at the heart of the City yesterday as foreign exchange broker Alpari UK went bust.
The firm, which employs hundreds of staff around the world and sponsors West Ham United FC, said it was forced into insolvency after it became liable for trading losses its clients could not cover.
A source close to the events predicted that the fall-out from the turbulence would see more companies hit and a major shrinking in the number of London’s foreign exchange players.
“If we can go within 24 hours, I think that says everything about the rest of the market,” he said.
“There are a whole host of others who over the next few weeks and days will announce the same thing or will be under big takeover discussions.”
Alpari said its client funds were segregated in accordance with Financial Conduct Authority (FCA) rules – which are designed to speed up the return of assets in the event of a financial firm going bust.
The FCA said: “We are aware of the situation and working closely with the firm.”
It was understood that the fall-out from the turbulence had resulted in Alpari going into urgent talks with its bankers late into Thursday evening but that as midnight approached it became apparent it could not be saved.